A better energy system is possible

Let’s imagine a different energy system. One that not only delivers clean decarbonised energy, but is increasingly local and run democratically in the interests of the people not big corporations.

I have been at the Trade Unions for Energy Democracy (TUED) conference looking at these very issues. TUED is a global, multi-sector initiative to advance democratic direction and control of energy in a way that promotes solutions to the climate crisis, energy poverty, the degradation of both land and people, and responds to the attacks on workers’ rights and protections.

Let’s start with decarbonisation. One speaker interestingly suggested that we should stop referring to ‘climate change’ and call it what it really is – global carbon gas pollution.

Climate agreements are aiming to keep global warming below 1.5%, but on current effort we are heading for 3.4%. The UK is simply not doing enough, but no country in the world is slowing down carbon emissions. For the UK a major effort is needed to meet a carbon budget cut of 57% by 2030 and at present the UK government has no real plan.

The UK Government does have new industrial strategy. However, it focuses on minimising costs rather than looking at potential of low carbon industry. There is little about cars, solar, offshore wind or efforts to re-skill workforce. We need to redirect energy and industry policy to climate change objectives – coupled with action on just transition, the role of state in regulation, social partnership and investment. Above all to escape from the dead hand of the Treasury.

Having regularly trekked down to London to see successive energy ministers, I still believe dumping the Carbon Capture and Storage (CCS) project was a huge error. Without it what is the solution for heavy industry in the UK? We also need to think about how we redesign heavy industries to achieve a just transition. For example, steel being reused rather than recycled, same for bottles, to save energy.

There are some positive signs in the development of UK Labour energy policy. The shadow energy minister, Alan Whitehead, has had a long term interest in energy, it’s not just any old portfolio. He wants to put climate change at the centre of policy. He recognises the need for just transition, the role of trade unions and new ambitious targets with meaningful delivery plans. Aiming for a million new jobs shows real ambition. The detail is to be worked up by a new Commission being launched later this month.

Decentralising the industry can be done by incentivising community energy projects on a much larger scale and through municipal energy companies. These should be about much more than retailing energy. They should be generating electricity, promoting demand reduction and energy efficiency as well.

The roadmap to public ownership isn’t about recreating a command and control nationalised industry. We don’t need to nationalise coal plants that are being phased out already or wind farms at the latter end of their 20-25 year lifespan. We do need public ownership of the transmission and distribution grids. Distribution grids don’t have to be the large regional model we use in the UK. Germany has 803, based on local councils. Spain has 335 and Sweden 184. This shows we can operate on a smaller scale, but we need more innovative councils in this field, prepared to consider vertically integrated municipal energy companies.

Work by David Hall shows that we could achieve a decentralised and more democratic energy system at a cost of £24bn, with annual benefits through lower prices of £3.2bn per year. We could also look at basing compensation on non-amortised assets as they have done in Catalonia. All of this needs a workforce strategy, otherwise we won’t have enough expertise to develop it.

I updated the conference on where we are on all this in Scotland – recognising that energy is mixed responsibility between Holyrood and Westminster. We have made significant progress in decarbonising electricity generation, with 42% from renewables and 35% from nuclear. We export 30% of the electricity we generate, even if intermittent sources mean more imports than before. The biggest energy demand is for heat (53%), 80% of this comes from gas, even though 400k households are still off the gas grid.

The Scottish Government is consulting on a draft energy strategy, which aims to deliver decarbonised security of supply at an affordable price. There is to be a new 2030 ‘all-energy’ target for the equivalent of 50% of Scotland’s heat, transport and electricity consumption to be supplied from renewable sources – together with the complete decarbonisation of electricity generation. Energy efficiency is a National Infrastructure Priority and this is to be achieved through the Scottish Energy Efficiency Programme (SEEP).

We haven’t made enough progress in decentralising local energy. It’s mostly big players with some local gain, financed through the local energy challenge fund. The Scottish Government wants to do better and has two new targets: 1 GW of community and locally-owned energy by 2020, and 2 GW by 2030 and at least half of newly consented renewable energy projects will have an element of shared ownership by 2020.

Targets and ambition are of course important, but delivery is even better. The draft strategy is vague on how to deliver the strategy. There are no targets for energy mix and few measurable milestones.

The Scottish Government does get the importance of linking energy policy to climate change and has also published a draft climate change plan, which will lead to new Climate Change Bill. However, this is even weaker on delivery. Poor performing sectors are largely avoided because it is politically difficult – including, transport, agriculture and domestic heat. We need measurable action on active travel, car use, housing efficiency, district heating and soil testing. They are also adding to the problem with the proposed cut in Air Passenger Duty.

Just transition hasn’t been given enough attention in plans. Some initial work has been done on this by trade unions and environmental groups. They have recently published an 11 point Just Transition Plan that includes a Just Transition Commission, training, secure jobs, a new industrial strategy, and action on procurement. This should also be built into the activity of the Fair Work Convention.

Energy policy is undergoing a huge change. Even a Conservative government has recognised the need for state intervention in a failed market. We should grasp this opportunity to imagine a very different energy system, which delivers for people and the planet.